News and Commentary

Department of Labor Rolls out Fiduciary Rules to Protect Retirement Savers by Eric P. Zeitlin

After much delay, the Department of Labor fiduciary rule finally went into effect on June 9, 2017, providing consumers with enhanced protections when receiving retirement saving advice from financial advisors and investment brokers who manage consumers’ 401(k)s, IRAs, pension plans and other retirement assets.

 

The Fiduciary Duty Rule, which will continue to roll out through January 1, 2018, requires financial institutions and brokers to act as fiduciaries and put their clients’ financial interests ahead of their own when making recommendations or selling products for which the advisor may earn a fee. More specifically, the law eliminates a potential conflict of interest by requiring advisors to do the following:

1.      Give advice that is in the “best interest” of the investor/customer and demonstrate both prudence and loyalty,

2.      Charge no more than a “reasonable compensation”, and

3.      Avoid misleading statements about investment transactions, compensation and conflicts of interest.

 

As a result of the law, many consumers can expect to receive in the future more detailed disclosures about the fees and commissions charged by financial institutions that solicit and/or recommend products and services to retirement savers. Yet, it remains the consumer’s responsibility to understand whether an advisor’s fees are reasonable and whether his or her investment recommendations are free of conflicts of interest. Consumer may research advisors online through the Financial Industry Regulatory Authority (FINRA) website at http://brokercheck.finra.org.

 

Many financial planners have long adhered to the fiduciary standard contained in the Employee Retirement Income Security Act of 1974 (ERISA) and conduct their businesses transparently and in the best interests of their clients. Additionally, many of the larger brokerage firms have already begun preparing for the fiduciary rule by either changing their broker compensation to a fee-based model, limiting commission-based compensation and/or offering investors a choice of fee structures and lower-cost investment products.

 

About the Author: Eric P. Zeitlin is managing director of Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services.  For more information, call 800-737-8804 or email info@provwealth.com.

 

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Eric P. Zeitlin is a registered representative of and offers securities through Raymond James Financial Services, Inc., Members FINRA/SIPC.

Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/deal and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.

 

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

 

The information contained in this report has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.


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